Adeno-associated virus serotype 2 (AAV2) is a non-pathogenic, human parvovirus that is being developed as a gene therapy vector. AAV2 requires co-infection with a helper virus, usually an adenovirus or herpesvirus, for efficient productive infection. In the absence of helper virus, AAV2 DNA can integrate into the host genome with a strong preference (70%-90% of integration events) for a 4 kb region of human chromosome 19, designated AAVS1 (the only example of site-specific integration in a mammalian virus system). This ability to specifically integrate also contributes to AAV2's attractiveness as a vector for gene therapy, since this could potentially limit the dangers associated with insertional mutagenesis. During AAV2 replication, the Rep68 and Rep78 proteins (Rep68/78) of AAV2 make a site- and strand-specific nick at the terminal resolution site (trs) within the stem of the hairpin structure formed by the inverted terminal repeats (ITRs) of AAV2 DNA. The nicking activity of Rep68/78 has also been found to be essential to the preferential integration process and a nicking site has been identified within AAVS1. The current nicking model suggests that the strand containing the nicking site is separated from its complementary strand prior to nicking. In AAV serotypes 1 through 6, the nicking site is flanked by a sequence that is predicted to form a stem-loop with standard Watson-Crick base pairing (i.e. A-T and G-C). By inspection, the region flanking the nicking site in AAVS1 (5'-GGCGGCGGT TGGGGCTCG -3' [gap indicates nicking site]) cannot form a similar stem-loop structure. We therefore performed an empirical search for a stable secondary structure. By comparing the migration of radiolabeled oligonucleotides containing wild-type and mutated sequences from the AAVS1 nicking site to appropriate standards, on native and denaturing polyacrylamide gels, we have found evidence consistent with the hypothesis that this region forms a compact secondary structure. Further confirmation was provided by circular dichroism analyses. By DNA migration analyses, we have identified several residues that appear to be important in forming this putative secondary structure. Mutation of some of these bases, within the context of an in vitro nicking substrate, significantly reduces the ability of the substrate to be nicked by Rep78. This secondary structure may therefore be important for the recognition of the nicking site by Rep68 and Rep78. In addition to the secondary structure, we have identified a conserved G residue 3 bases upstream from the GTTGG motif that is important for nicking. These results may further help to explain the specificity of AAV2 integration. When expressed at high levels, Rep68 and Rep78 block cell division and the formation of certain tumors, by mechanisms that are poorly understood. Expression of the rep gene from its natural promoter does not have a significant effect on cell division, due to the fact that, in the absence of helper virus, the Rep proteins repress their gene's promoter via multiple mechanisms. We have constructed a plasmid in which the rep gene is ligated to a modified version of the HIV-1 long terminal repeat (LTR) promoter. This plasmid was predicted to have low expression of Rep proteins in the absence of the HIV-1 Tat transactivator protein. We have used this plasmid to establish stably transfected lymphoid cell lines containing the rep gene. These rep gene-containing cells grow slower than the parental cells, consistent with low-level expression of the Rep proteins. It is our hope that these cell lines will provide a platform for identifying genes involved in Rep-mediated inhibition of tumor growth.